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A Share of Perpetual Preferred Stock Pays an Annual Dividend

Question 1

Multiple Choice

A share of perpetual preferred stock pays an annual dividend of $6 per share.If investors require a 12 percent rate of return,what should be the price of this preferred stock?


A) $57.25
B) $50.00
C) $62.38
D) $46.75
E) $41.64

Correct Answer:

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